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South Korean regulators have recently taken significant steps to ensure the crypto space is well regulated. From cracking down on “unlicensed” exchange platforms to imposing a tax on cryptocurrency gains, the country was constantly in the news.
South Korea’s crypto tax regime, which will impose a 20% tax on cryptocurrency gains exceeding 2.5 million Korean won ($2,100), is set to go into effect in 2022.
However, there has been an update on the situation.
THE PEOPLE POWER PARTY OF SOUTH KOREA IS PROPOSING A FURTHER DELAY AND ADJUSTMENT OF THE PLANNED TAX RATE ON CRYPTO PROFITS.
— BreakingCrypto (@BreakingCrypto5) October 11, 2021
“The People Power Party’s bill suggests a one-year delay for crypto gain taxation to 2023 along with a more generous tax redemption than currently planned.”
As per their suggestion,
“The lawmakers plan to revise the current law to impose a 20% tax rate for profits between 50-300 million won ($42,000-$251,000) and 25 percent for profits above 300 million won. This is in line with the Financial Investment Income Tax, which is to be implemented starting from 2023.”
Cho Myoung-hee, a representative of the People Power Party commented on the same. He even highlighted the motive behind this move. He opined,
“It is not right to impose taxes first, at a time when the legal definition of virtual currency is ambiguous. The intention is to ease the tax base to the level of financial investment income tax so that virtual currency investors do not suffer disadvantages.”
The said party is expected to submit the proposed bill as early as tomorrow, the report noted. Although, no further details were mentioned.
Nonetheless, the government was unfazed. During a parliamentary hearing, Finance Minister Hong Nam-ki, for example, downplayed the possibility of postponing taxation. “Delaying taxation on virtual assets is difficult in terms of policy reliability and legal stability,” he said.
This was not the first time the proposed move was met with opposition. Previously, Noh Woong-rae, a member of the ruling Democratic Party, stated that the country’s taxation plans needed to be postponed until a sufficiently prepared infrastructure was in place.
It’s important to consider that this crypto tax bill was one of many strict regulations enacted by the government in recent times. This could shape the country’s cryptocurrency market moving forward.